[Interview] AmCham Chairman: "Attracting Asia Headquarters Will Increase Jobs and Investment"

Must Attract Asia Headquarters
Domestic Jobs and Investment Can Increase
South Korea Ranks 97th in Labor Flexibility Worldwide
Lower Than Competitors Like Singapore and Japan

Two Months Before US Election, Washington 'Door Knock'
Meeting Key Figures to Request Passage of Korea Partner Act
'Global Company Asia-Pacific Headquarters' Attraction Strategy
AmCham Report Delivered to President Yoon

South Korean Government Understands Semiconductor Importance Well
Will Support Companies Through Various Channels

South Korean Companies Investing 130 Trillion Won in US
Now Is the Best Time for Korea-US Relations

Following the publication of the report, tangible achievements have been made, including discussions on forming a task force (TF) with the government, and the activities of CEO and Chairman James Kim and the American Chamber of Commerce in Korea (AMCHAM) are expected to gain further momentum. He is scheduled to visit Washington D.C. in early September. There, he will participate in AMCHAM's annual 'doorknock' activity. Through doorknock, AMCHAM has been meeting with senior officials from the U.S. government and Congress to promote the business environment of South Korea. This year, with the increase in U.S. investment by domestic companies, the issue of professional visas has emerged as a key concern. Chairman Kim emphasized, "We plan to meet influential figures in the U.S. government and Congress to request the passage of relevant legislation." This year's doorknock is particularly noteworthy as it will take place about two months before the U.S. presidential election on November 5.

James Kim, Chairman of AmCham, is giving an interview to Asia Economy at the office in Yeouido, Seoul. Photo by Yongjun Cho jun21@

The following is a Q&A with Chairman Kim.

Q. The 'Strategy Report on Attracting Global Companies' Asia-Pacific Headquarters to Korea' published by AMCHAM received significant attention. I understand you also briefed the Presidential Office.

A. Regarding the report, I have explained it not only to the Presidential Office but also met with Choi Sang-mok, Deputy Prime Minister and Minister of Economy and Finance. We also discussed key points with the Economic, Social and Labor Council (ESLC). (Regarding attracting Asia headquarters) A few years ago, the Korean government did not show a clear stance. But now, the situation is very clear, especially the relationship between Korea and the U.S. This is evident from various statistics. Looking at the number of global companies' headquarters in the Asia region, Singapore has about 5,000, Hong Kong 1,400, and Shanghai 900. But Korea has fewer than 100. Despite having many favorable conditions, Korea seems to be lagging behind. Attracting headquarters increases domestic jobs and investment. So, I always think we need to attract many.

Q. The report pointed out that we need to address CEO criminal liability risks, regulatory improvements, and high corporate taxes. Which issue do you think is the most important?

A. I would highlight labor flexibility. Korea ranks 97th globally in labor flexibility, which is much lower compared to competitors like Singapore (1st), Japan (11th), and Hong Kong (19th). Large companies need to invest heavily, which means hiring many employees. If the business does not go as planned, workforce adjustment becomes necessary. At this point, Korea lacks flexibility. In the U.S., workers sign that they can leave the company at any time. This implies that if the company faces difficulties, employees can leave. Singapore and Hong Kong are similar. Of course, no one likes companies laying off people. But when business is not doing well, reducing workforce creates room for investment.

James Kim, Chairman of AmCham, is giving an interview to Asia Economy at the office in Yeouido, Seoul. Photo by Yongjun Cho jun21@

Q. There are concerns that expanding labor flexibility might reduce employment stability as a counter-effect.

A. The most important thing is for workers to improve their skills independently. They should develop abilities to work anywhere. Korea has a mindset of working at one company for a long time, which can be challenging. In the U.S., people can work at large companies even at age 80. Conversely, young people can leave anytime due to flexibility. This is a major difference from Korea.

Q. You recently held a policy meeting with Kim Moon-soo, Chairman of the ESLC.

A. Yes. At that meeting, seven members from the ESLC attended. Ramsey Toubasi, President of AIG General Insurance, also came. Mr. Toubasi is a complete foreigner with experience working in Singapore and Malaysia. He said Korea is a good place to live but lacks English friendliness. Almost everything, including government offices and street signs, is in Hangul. Mr. Toubasi said he personally does not find it difficult, but his wife struggles with daily life. For example, driver's licenses and banking systems are mostly in Hangul, making it not very English-friendly.

The language issue is also comparable to China. Mr. Toubasi visited Shanghai and said most things were in English. He thinks China is changing rapidly. Korea can also start changes quickly, especially in areas with many foreigners like Itaewon, and then expand overall. Although I am Korean-American, most foreigners find this issue very difficult. Because it is so hard, many rely heavily on Google Translate. Still, such technology has developed and made things somewhat more convenient.

Q. Do you intend to seek cooperation from the National Assembly, especially the opposition party, for attracting headquarters?

A. Of course. We are currently in talks. Two weeks ago, we held a business seminar related to this. Park Jung, a member of the Democratic Party, also attended. Mr. Park plays a significant role in labor-related matters in the National Assembly. Generally, the National Assembly seems to view this issue positively. We are communicating with both the government and the National Assembly regarding what we want to achieve.

Q. Have you ever spoken with Lee Jae-myung, leader of the Democratic Party?

A. Yes, I have known him well for a long time. I met him frequently when he was Mayor of Seongnam, Governor of Gyeonggi Province, and a presidential candidate. I remember when I was President of Microsoft Korea, he invited me to Seongnam and expressed a desire for Microsoft and Seongnam City to sign an MOU. Although that was a long time ago, I still consider us quite close.

Q. Semiconductor subsidies have recently been a hot topic. I believe our companies need to do well domestically to invest in the U.S. How do you view subsidies for advanced industries?

A. The Korean government understands the importance of semiconductors well. The approach they are considering might be somewhat different, but I believe the Korean government can support companies through various channels.

Q. Do you think the current U.S.-China relationship is definitely affecting companies?

A. I have lived in Korea for almost 20 years, and I think this is the best time for Korea-U.S. relations. Korean companies like Samsung Electronics, Hyundai Motor, and SK Hynix have expanded significantly in the U.S., with confirmed investments totaling about 130 trillion won. So, relations with the U.S. definitely look good, and many U.S. companies have also entered Korea. AMCHAM's survey showed Korea as the second most desired country for companies to come to. The relationship with China is similar. I don't think Korean companies leaving or not entering China is necessarily because of the U.S. If China improves its environment and attracts companies well, Korean companies have no reason not to go. It's hard to say the U.S. has a big influence on Korea-China relations. Considering that, I think the U.S. has done well in business.

Q. There are concerns that the U.S. might feel uncomfortable due to Korea's growing trade surplus with the U.S. over the past five years.

A. From the U.S. perspective, Korean companies have invested about 130 trillion won, creating many jobs. The U.S. does not seem to be overly worried about this.

James Kim, Chairman of AmCham, is giving an interview to Asia Economy at the office in Yeouido, Seoul. Photo by Yongjun Cho jun21@

Q. The U.S. presidential election in November is a hot topic. Could the situation make it difficult for our companies?

A. Naturally, policies change when the president changes. When President Joe Biden was elected, ESG (environment, social, governance) was strengthened. It was an unfamiliar area before. I think Korea-U.S. relations are currently good and business is going well. I don't think a re-election of former President Donald Trump would cause significant losses to Korean companies. Trump is a businessman, very pragmatic and practical. He might even align well with us, who act quickly. Instead of only thinking negatively, we should also see the positive side.

Q. Will there be changes to the Korea-U.S. Free Trade Agreement (FTA)?

A. Korea might gain or lose from that. However, I believe communication will be good. Even during the Trump administration, I don't think there were major problems for Korea. There were many negotiations. I think the next administration will not be much different. Predicting the election is impossible. In the U.S., the atmosphere is about 50-50. There are six months left until the election, so there is plenty of time.

Q. Visa issues are often cited as the biggest obstacle when Korean companies enter and invest in the U.S. Can AMCHAM play a role?

A. I definitely think we should. We will go to Washington D.C. in early September. There, during the annual 'doorknock' event, we plan to meet influential figures in the U.S. government and Congress to request the passage of legislation. The schedule is still being coordinated, but we expect to meet many officials as we did last year. Last year, we met six members each from the Senate and the House. The U.S. cannot ignore the employment visa issues for Koreans. If visas become a barrier making it difficult for Korean companies to send their people to work in the U.S., it could ultimately be a negative outcome for the U.S. as well.